Ursula Von der Leyen, the president of the European Commission and candidate for a new term after the elections next June, declared on Friday in the Financial Times that Europe must substantially increase its military budget: “We have to spend more, we have to spend better "We have to spend European." Yesterday she announced that she will propose the creation of a Defense Commissariat that she has already announced would be awarded to an Eastern country, close to the war zone in Ukraine.
Also yesterday, the German Minister of Defense, Christian Lindner, explained that his objective is to raise his country's defense spending to 3.5% of GDP (gross domestic product, what the economy produces in a year) – now it is barely reaches 2% – while announcing that his Government will campaign to dispel the prejudices of investors to direct their money towards military companies.
Most European countries have increased their military budgets since the Russian invasion of Ukraine. Spain, for example, has more than doubled it since the year before the pandemic. The statements of Donald Trump, possible next president of the United States, giving approval to Russian aggression against NATO partners that do not spend enough on Defense, have also contributed to giving an additional boost to calls to strengthen the industry. European military. Although today NATO's European partners spend on Defense, especially with purchases from the US, several times more than Vladimir Putin's Russia.
The problem for Europe is that while these pronouncements in favor of a strong, unified and concentrated military industry grow, in number and emphasis, it is preparing to recover the fiscal stability standards, which will begin to be applied next year and which aim to reduce the deficits and debts of the member states. Return to austerity, although with some moderation compared to that applied during the financial crisis and somewhat more a la carte.
This in a context in which it is theoretically intended to promote the agenda of the green reconversion of the economy and promote the reindustrialization of the continent, both objectives that imply allocating enormous amounts of money to subsidies and aid. And at the same time, it is maintained that the objective is to maintain the welfare states characteristic of European societies.
Will all of this be possible – increasing military spending and changing the economic model, reducing debt and maintaining social services – at the same time? Will the increase in Defense budgets mean the end of the so-called peace dividend? As seen in the simple table below, prepared by experts from the Kiel Institute and presented at the Munich security conference this weekend, referring to the G-7 countries – Germany, Canada, France, Italy, Japan , the United Kingdom and the United States–, historically there has been a direct relationship between the decrease in military spending and the increase in social spending.
It is a brilliant graphic synthesis of the thirty glorious years after the Second World War and the expansive phase of globalization that began in the 1980s and is now in question.
And it can be deduced that this reasoning can be extended to other areas of potential alternative use of public resources to the military.
It is detected behind the arguments of the defenders of rearmament that one of the intentions would be to increase in this way the competitiveness of the European industry, clearly lagging behind that of the US and partially China. A kind of reindustrialization at the hands of the military industrial complex, a term coined by Dwight D. Eisenhower in 1961. It is the other side of war, in this case commercial, which allows states to become claimants of their own industry, a market protected and captive at the same time.
Until now, the United States has been the only country in the history of capitalism capable of maintaining enormous weapons programs, including wars, increasing its public deficits and running out of debt, without raising taxes, even lowering them, or cutting spending. And that is because it enjoys the privilege of financing itself by issuing almost unlimited amounts of the reference world currency, the dollar. Also selling their weapons, by will or by force, to their partners.
Europe does not seem to be in a position to do such a thing. And of course, in the economic sphere, the so-called austere countries, with Germany at the forefront, do not even think of questioning their Cartesian accounting principles to carry out American-style financial tests.
In these first stages of European rearmament, it will be necessary to redefine priorities. As is already being put on the table, the green agenda is one of the most obvious candidates to pay the bill. The agricultural protest of these weeks has served him on a plate and the rapid surrender of the Commission may have been quite a relief. There are other folders, such as pensions, health or immigration, that will give a lot to talk about. Europe is facing a major debate about its model with a high political and social charge.
